Wednesday, June 25, 2014

Donny Rico on how Chevron's legal thuggery really works

At long last we bring you Episode #3 in The Adventures of Donny Rico, a clever deep dive into the methods used by Chevron in its desperate and unethical campaign to turn the tables on the very victims it poisoned in Ecuador's rainforest. [Watch Episodes #1 and #2 here and here.]

Take it from Donny: it's no secret that Chevron has spent millions upon millions of dollars in an abusive "scorched earth" legal strategy to attack not only the villagers and their representatives who have held the company accountable in Ecuador, but virtually anyone who supports them. This is part of a decades-long legal strategy to delay paying for a clean-up, to deny the facts and simply to try to crush the opposition which has been gaining the upper hand yet again.

As a recent Huffington Post article stated in relation to Chevron's abuse of our civil justice system to evade its obligations in Ecuador: "Chevron has put an unprecedented amount of resources into its campaign against the Ecuadorian villagers, hiring more than 60 law firms and 2,000 legal professionals to wage a war of attrition, wearing the plaintiffs down through countersuits and flooding them with a constant barrage of paperwork."

In this case, Chevron hired a law firm willing to throw ethics to the wind and take extraordinary steps to concoct a story of Chevron as the actual VICTIM of a conspiracy. Just imagine what it would take to try to turn the tables after Chevron had ADMITTED to dumping toxic waste into the Amazon rainforest.

Well, it turns out the best way to do it is to go the ol' Nixon route and try a bunch of dirty tricks – and then accuse the other side of doing just those things. Who better to lead the campaign than the "guns for hire" known as Gibson Dunn & Crutcher? The same firm the Montana Supreme Court blasted for using "legal thuggery" and "blatant and malicious intimidation" tactics while another U.S. federal judge said that the firm maintained "a culture [of] obstruction and gamesmanship."

Just like their sister spin-doctor and PR flack Sam Singer, Gibson Dunn is quite open about using a template to defend its high-profile corporate clients who are losing legal cases or are trapped in scandal. It does this by targeting the lawyers or witnesses who held their clients accountable with character assassination and defamation campaigns.

Gibson Dunn masterminded a strategy where a single U.S. judge with more arrogance than Dick Cheney re-litigated the eight-year Ecuador trial in his courtroom in what can only be described as a Kafkaesque proceeding. The judge refused to consider the Ecuador trial record, the 64,000 chemical samplings results that proved Chevron committed a massive environmental crime, or the Supreme Court decision that already considered Chevron's complaints and rejected them.

How did Chevron and Gibson Dunn get it done? First they spent years trying to create dirt and get it to stick. They mounted racist attacks on Ecuador, hired PR firms and bloggers to attack the Ecuadorian communities, Ecuador's legal system, and of course the lawyers, activists, human rights defenders or allies supporting them. They launched "sting" operations, attempted to entrap judges, hid information about contamination from the court and turned a straightforward case into what is probably the most abusively litigated nightmare in the history of world jurisprudence. The trial in Ecuador took over a decade to complete.

While Chevron – under the "leadership" of CEO John Watson – was stitching together its Frankenstein monster in Ecuador, it laid the groundwork in the U.S. to fabricate a massive "conspiracy" to be used to try torpedo and delay the verdict they knew would be against them around the world.

Chevron and Gibson Dunn filed dozens of discovery lawsuits across the county and racked up over $36 million in legal fees. They tried to find any court that would hear their trumped up allegations. Many rejected them and one federal appellate court in Philadelphia reversed a discovery order stating "[t]he circumstances supporting [Chevron's] claim of fraud largely are allegations and allegations are not factual findings." The appeals court further chastised Chevron's attacks on the Ecuador courts as "disparaging." Some judges dismissed the firm's legal attacks under laws designed to fight "SLAPPs" (Strategic Lawsuits Against Public Participation, i.e. intimidation suits), while others ordered Gibson Dunn to pay fees to its adversary and other sanctions.

But when you have a self-deluded management team with unlimited shareholder funds and an army of lawyers, when confronted with resistance you simply dust ‘em off and try again. So the Chevron and Gibson Dunn fishing expedition eventually nailed a real whale with U.S.Judge Lewis A. Kaplan. With Kaplan essentially taking on the role of Chevron's prosecutor-in-chief in a courtroom where he officially presided as judge, the oil company and Gibson Dunn had never had it so good. The fact that Kaplan's show trial proceeding fell below minimal standards of due process is completely ignored by the company, even though the deep flaws in the proceeding will likely prove fatal to any effort by Chevron to use Kaplan's opinion to block enforcement actions in other jurisdictions.

Kaplan himself encouraged Chevron to file the RICO suit and assigned the case to his own court. He also called the villagers the "so-called" plaintiffs and said their case did not constitute "bona fide litigation" but instead was akin to "mud wrestling." He said the main legal advisor to the Ecuadorians, Steven Donziger, was using the case to become the "next big thing in fixing the balance of payments deficit" of the United States. Really?!

The story of the sham trial has been told many times on Eye on the Amazon. And Donny Rico will have more to say about the particulars of Chevron's (with Kaplan's encouragement) bribing of witnesses and creating fake conspiracies. But it still took massive resources to keep the truth from prevailing in court, and Chevron and Gibson Dunn had many ways to ensure this. Intimidation, pressure and legal might simply made it impossible for opponents to defend themselves.

If they came up against a consulting business that supported the Ecuadorians, they would pressure their other clients to drop them with fake allegations. Stratus Consulting, which had provided scientific reports backing the claims of toxic contamination, is a perfect for example. Chevron tried to block their access to government contracts essential to keeping their business afloat. They hounded Stratus to the brink of bankruptcy by filing misleading complaints with government agencies and creating defamatory websites. Stratus quickly buckled under the legal thuggery and signed a statement written by Gibson Dunn in favor of Chevron and in obvious contradiction to the facts in Ecuador and to the previous sworn statements of the group's consultants.

When facing opposition from journalists, Gibson Dunn either used Kaplan's court or legal threats to intimidate and force them to kill their stories, or to turn over all their sources and footage. Chevron fought CBS's 60 Minutes tooth and nail to prevent production of what turned out to be an extremely damning report (which, by the way, won the 2010 Edward R. Murrow Award). After winning Kaplan's verdict they scared CBS enough to remove the story from the company's website (still found here).

When they faced another big law firm (Patton Boggs) on the side of the Ecuadorian villagers, bullying Gibson Dunn simply found their weak spot and pressed as hard as they could until the firm backed down. Patton Boggs was counting on a merger with a larger law firm to rescue it from its economic problems. With a Kaplan-backed lawsuit filed by Chevron hanging over their heads, Patton Boggs paid Chevron $15 million to back off in violation of their own ethical obligations to their clients.

And what to do when facing growing grassroots pressure and shareholder dissent organized by environmental or human rights groups? Chevron and Gibson Dunn used multiple nasty strategies of attack. They went after our funding, tried to damage our reputation and used more legal thuggery to try to bog us down with massive subpoenas seeking hundreds of thousands of documents detailing campaign strategies and donor information.

But that's just where Gibson Dunn hit a snag. Backed by the pro bono support of excellent human rights and environmental lawyers from EarthRights International, Amazon Watch was ready to defend itself and did. The attacks from Chevron only demonstrated our own effectiveness to our donor base and actually strengthened our organization's resolve to press on.

When Amazon Watch was defending itself in federal court from Chevron subpoenas, Gibson Dunn repeatedly tried to move the case – improperly - into the hands of Judge Kaplan in New York. They failed. And in their attempts they were almost sanctioned by Federal Judge Nathaniel Cousins in San Francisco for serving such overly broad and abusive subpoenas. I guess they started to get a little drunk with power from Kaplan's unending support and got sloppy. But when this real judge looked impartially at their request, he stated that despite over 70 Gibson Dunn filings claiming that Amazon Watch was a conspirator "all that Chevron has shown this Court is that Amazon Watch has been very critical of Chevron's operations in Ecuador." He then warned Chevron that if it tried the same tactics again they had better take great care to "avoid infringing upon the organization's First Amendment rights. Otherwise, the Court (would) impose sanctions."

Gibson Dunn had to let that one go, and I am guessing they're still stewing over it.

One could write hundreds of pages detailing Gibson Dunn's dirty tactics, but we'll leave it to Donny on this note. As he mentions, Gibson Dunn's lead lawyer Randy Mastro personally met in Chicago with Chevron's key witness – disgraced ex-judge Guerra – to negotiate the exchange of huge sums of money and other benefits in exchange for his "factual" testimony. They also doctored video evidence and possibly engaged in fraud on the Ecuador court by failing to disclose that its technicians were ordered to hide dirty soil samples. The list of unprecedented attack on justice waged by Chevron and Gibson Dunn goes on and on. Increasingly disturbing to many is that their "pioneering" work could make it easier for other corporations to do the same without having to spend nearly as much. Kaplan's verdict, though likely to be overturned, could set a dangerous precedent by criminalizing First Amendment protected activities by environmental, human rights and corporate accountability groups.

Which leaves one wondering what's worse: committing the crime and then refusing to clean up, or wasting over a billion dollars to pay rich lawyers to fight while Ecuadorian communities continue to suffer? Actually, they are simply two different sides to the same Chevron coin.

Tuesday, June 24, 2014

The
appetite for hypocrisy among Chevron’s “rescue team” at the law firm Gibson
Dunn & Crutcher (GDC) knows few bounds. Our latest example, courtesy
of GDC appellate partner and former Solicitor General Ted Olson, is truly
astounding.

After the
GDC trial team led by Randy Mastro bribed a key witness to win its farcical RICO case in New York, and after
Chevron scientists orchestrated a massive scientific hoax on the courts of
Ecuador, we now have Chevron’s most prominent outside lawyer and a leading
beacon of the Republican establishment working with two directors to make a
documentary film about his own case.

Sound
familiar? Olson and his minions at GDC have directed furious criticism at
New York Attorney Steven Donziger for doing the same thing with the Ecuador
litigation. In reference to Ecuador, they even have argued that making such a film results in the wholesale
waiver of attorney-client privilege and is part of an “extortion” campaign
against Chevron.

Olson’s
new film, The Case Against 8, aired earlier this
week on HBO. The film documents the travails of Olson and his team as they
fight to the Supreme Court to overturn a California law (called
Proposition 8) barring gay marriage.

In the
film, Olson and his allies openly use the media and tools of political
organizing – including raucousprotests
in front of courthouses – to advance their legal case and pressure courts via
the mobilization of public opinion. These are the same time-worn tactics used
by civil rights litigators the world over, including Donziger and the
indigenous leaders in Ecuador. Yet the GDC team claimed the use of
the exact same tactics in Ecuador was improper.

That’s the
gist of the Chevron hypocrisy. It’s the same double standard that
says Ecuadorians should put up with massive levels of toxic soil contamination
because they live in Ecuador rather than in America.Chevron proposed a clean-up standard for toxic oil waste to the Ecuador court that literally was 100 times more lax than the average
American standard. When the court rejected the preposterous proposal, Chevron hilariously claimed the judges were biased against the company.

More
interesting for our purposes is that in the Prop 8 case Olson gave the HBO filmmakers an
all-access pass to confidential meetings where lawyers were discussing internal
strategy and highly sensitive issues with witnesses and clients.

In the
Chevron case, GDC pilloried Donziger and Ecuadorian lawyer Pablo Fajardo for
offering similar access to director Joe Berlinger, who produced the award-winning
filmCrude on the Ecuador case. (Crude, based on
our completely unbiased perspective, makes for a far more interesting film than the
HBO flick.It is available from Netflix.)

Chevron’s
criticism led to a vast “waiver” of attorney-client privilege that allowed GDC
access to all 600 hours of Berlinger’s outtakes. The GDC team
then sliced and diced the outtakes into fodder for its trumped-up RICO case, eliminating
key phrases to falsely portray Donziger as a thug when he was really battling heroically to neutralize Chevron’s attempted corruption of the Ecuadorian court system, as
documented in part in this stunning affidavit and related legal briefs.

Olsen authorized
the HBO film team to “embed” itself for over four years with his legal
team. Going along with the decision was none other than David Boies,
one of the top litigators in the country who also worked on the Prop 8 case and who is featured prominently in the HBO film.

In an interview posted on the HBO website, the
filmmakers brag about the “incredible access” they had to the internal deliberations
of the GDC-led team. Director Ben Cotner described how Olson allowed him
to effectively “blend into the background”: “We'd slip in
and out of rooms, sometimes in the middle of meetings. People got so used to us
being there that eventually we were just allowed to be part of that
process.”

His
co-director Ryan White added that it was his policy to “keep the cameras on” at
all times: “We shot 600 hours of footage, and many of those hours are probably
really boring stretches when we're just rolling a camera in a conference room,
since we didn't know when an important phone call was going to come in or when
a ruling might come down.”

The
filmmakers assert that this opportunity to “embed” was specifically with the
legal team, not with the plaintiffs in the case. As it turns out,
the plaintiffs were far more circumspect and only gradually allowed the
filmmakers to follow them for a limited set of activities.

Chevron’s
hypocrisy is legendary: The company spent a decade in the 1990s telling a New
York court it wanted the environmental case heard in Ecuador. When the evidence against it mounted, Chevron came running back
to New York saying Ecuador’s courts were incapable of providing a fair
trial. The company’s desperate
campaign of forum shopping has now taken the matter to more than 30 courts around
the world.In the meantime, villagers
wait for Chevron to comply with a court-mandated clean up of the billions of
gallons of toxic waste it has admitted to dumping.

We
certainly look forward to seeing HBO's video outtakes from Olson and the other
GDC lawyers. They might be of interest to foreign courts that are being asked by the rainforest
villagers to seize Chevron’s assets to force the company to comply with the
rule of law and pay the Ecuador judgment.

Wednesday, June 18, 2014

To understand how utterly venal Chevron's toxic dumping and fraudulent cover-up was in Ecuador, we now have yet another layer of unassailable proof.

It comes in the form of a new scientific study from the prestigious U.S.-based Louis Berger Group (LBG) that confirms Chevron's predecessor company Texaco engaged in a deliberate policy of poisoning Ecuador's rainforest. Scientists from the group spent several weeks in Ecuador in 2013 inspecting and taking samples from 18 former Chevron well sites.

This trip took place after the end of the historic Lago Agrio trial, where Chevron was found liable for creating extensive pollution in the rainforest when it operated there under the Texaco brand from 1964 to 1992.

The latest conclusions from the LBG are devastating for the oil company: all of the sites inspected were extensively contaminated with harmful toxins, local residents were observed swimming and bathing in oil-laced streams, and the human health risk for cancers and other serious illnesses was startlingly high.

The LBG scientists confirm what the Ecuador trial court found based on Chevron's own evidence, the evidence submitted by the affected communities, the internal audit reports prepared by Texaco in the early 1990s that documented its own contamination, and a series of third party studies, including one by researchers from Harvard Medical School.

Interestingly, in the face of this overwhelming evidence of guilt, there is only one judge in the world who has ruled in favor of Chevron on this matter – U.S. Judge Lewis A. Kaplan. Yet Kaplan, known for his documented bias against the Ecuadorians and their counsel, refused to consider any of the voluminous evidence of environmental contamination in Ecuador before determining the judgment in Ecuador has no validity.

We have documented how Kaplan's decision was the product of a skewed show trial proceeding that did not even incorporate the 220,000-page trial record in Ecuador or the LBG findings. He essentially overruled Ecuador's Supreme Court on questions of Ecuadorian law. Kaplan already has been reversed once in the case when he tried to impose an unprecedented global injunction purporting to bar the Ecuadorians from even trying to enforce their judgment anywhere in the world.

The latest Kaplan decision is not binding outside the U.S., where the affected communities are seeking to seize Chevron assets. It is also likely to be overturned on appeal. But as an illustration for what can go wrong when a U.S. judge with lifetime tenure lets his own pro-corporate ideology engineer judicial outcomes, it is Exhibit A.

Chevron CEO John Watson, he of the low golf handicap and $24 million salary, continues to do nothing about the company's environmental catastrophe other than kick the can down the road by paying an army of American lawyers an estimated $400 million annually in fees. As Ecuadorian lawyer Juan Pablo Saenz said in the press release below, the entire thing is more than illegal and immoral – it is sickening.

LBG also discovered that Chevron designed an elaborate hoax to hide its contamination from the Ecuador court. It did this by secretly pre-inspecting contaminated sites before the judge showed for the official inspection. During these secret site visits, the company found massive evidence of its own contamination.

Not surprisingly, Chevron never disclosed its secret sampling results to the court and is still seeking protective orders to hide them from the public.

In front of the judge-supervised field inspection in Ecuador, Chevron's technicians used their secret information to search only for "clean" soil and water samples well outside the area of the waste pits and usually upgradient from the site. It tried to pretend like it was engaging in random sampling, but the judge did not buy it.

It all sounds like a rather clumsily executed fraud, courtesy of Chevron scientists Sarah McMillan and John Conner and the legal team headed by Ricardo Reis Veiga (currently a major Chevron executive) that directed them. The fact Chevron still submitted dirty soil samples to the court from the official judicial inspection demonstrates just how saturated the sites were with cancer-causing oil waste.

There are many hours of video shot by Chevron documenting its secret pre-inspections process. Some of them show Chevron's technicians laughing at the pollution and mocking the court process. To protect Chevron, Judge Kaplan sealed them from the public. If these videos ever get out, it will be further devastating evidence of the depths to which the company has sunk.

In any event, the press release below provides a more detailed explanation of this new evidence from LBG – and how it is certain to shake up the case in favor of the villagers by helping them defeat Chevron's preposterous claim that the entire litigation is a "sham".

The villagers are currently trying to seize Chevron assets in Canada, Brazil, and Argentina so they can pay for the clean-up that probably could have been avoided had Texaco just drilled in conformity with international standards.

Company also hid dirty samples from Court; New boost to villagers as they seek Chevron assets abroad.
The report – published by the Louis Berger Group (LBG), a consultancy that has worked for several U.S. government agencies – also found that Chevron engaged in an elaborate cover-up to hide the information from the Ecuador court during the Lago Agrio trial, which lasted from 2003 to 2011. The report has the potential to shake up the long-running case in favor of the rainforest villagers as they pursue Chevron's assets in Canada, Brazil and Argentina to pay for a clean-up.
The LBG scientists who wrote the report spent several weeks in Ecuador in 2013 to inspect 18 of Chevron's former well sites, which are spread out over a 1,500 sq. mile area of rainforest just south of the Columbia border. The report was prepared at the request of the American law firm Winston & Strawn for a private international arbitration where Chevron is seeking – thus far without success – to shift the clean-up liability to Ecuador's government.
The LBG scientists chose the sites based on a representative sampling of the estimated 375 polluted wells and production facilities built and operated by Chevron's predecessor company Texaco between 1964 and 1992. Many of the same sites also were inspected by the Ecuador court during the Lago Agrio trial, which resulted in a finding of liability against Chevron for deliberately discharging billions of gallons of scalding, toxic-laced production water into rainforest waterways and abandoning hundreds of unlined waste pits which contain cancer-causing hydrocarbons.
The findings of the LBG report essentially confirm the findings of the Ecuador trial court that Chevron is responsible for widespread pollution, as follows:

At well sites in Ecuador that had been operated only by Chevron and closed before the company left in Ecuador 1992, LBG's scientists found extensive pollution that still – more than two decades after Texaco left Ecuador – poses a significantly increased risk to the local population of cancer and other oil-related health problems, such as immune system deficiencies and spontaneous abortions.

Based on a separate review of the scientific data submitted to Ecuador's courts by Chevron and the villagers, the LBG group concluded that the oil company's own evidence proved the case against itself by documenting extensive levels of pollution at sites that only the company operated – even though Chevron's lawyers tried desperately to hide some of its own damning sampling results from the court. The review included more than 64,000 chemical sampling results considered by the court.

The LBG scientists found illegal levels of toxins – including Total Petroleum Hydrocarbons, heavy metals, and brine – in soil, sediment, and surface water at each of the Chevron sites tested. They concluded that their results were consistent with high levels of pollution found by Chevron in its secret "pre-inspection" sampling that the company hid from the Ecuador court. (LBG managed to access Chevron's secret pre-inspections data through independent discovery litigation in U.S. federal courts related to the international arbitration dispute. The villagers were not a party to those litigations and thus did not have access to any of the new data until Ecuador's government made a portion of it available to the general public.)

The team also found that Chevron had installed gooseneck pipes in the sides of its waste pits that "continue to this day to allow contamination to flow out of pits and away from sites"; and that LBG's sampling demonstrates that "contamination flowed vertically down to the water table and then emerged in springs or the sides of streams" that the local population relies on for its drinking water.

In sum, the team found that Texaco violated Ecuadorian law, generally-accepted international standards in place during the time it operated, and its own contract with Ecuador's government that required it to not pollute the environment. Notably, none of the extensive evidence of environmental contamination confirmed by LBG and considered by the Ecuador court was reviewed by New York Judge Lewis A. Kaplan when he found in Chevron's favor in a deeply flawed RICO trial against the villagers that concluded this year.
The LBG report also found that during the Lago Agrio trial Chevron artificially lowered toxic levels it reported to the court by deliberately using a flawed test that severely underestimated oilfield contamination. It also employed "composite sampling" where dirty soil samples from well sites were mixed with clean samples from the nearby forest to lessen the apparent impact. The villagers have called such methods "junk science" and long asserted they are part of an elaborate hoax designed by Chevron scientists, led by Sarah McMillan and John Conner, to deceive courts around the world.
"The weight of the evidence is overwhelming," said a summary of the report submitted by Winston & Strawn to the international arbitration panel, available here. "[Chevron's] contamination has caused and continues to cause massive human health and environmental impacts" severe enough to easily justify the $9.5 billion damages award, according to the legal brief.
The human health impacts of the pollution, which has lasted for almost one half-century in an area that is home to numerous indigenous tribes, were also a subject of the LBG inquiry. Scientists from the group reported observing children and others playing and bathing in streams clearly contaminated with oil. One of the experts used by LBG, Dr. Phillippe Grandjean, concluded based on various independent studies that cancer rates in the area where Chevron operated were high – including up to 47 times higher than the norm.
"The human health impact from the contamination is significant," said the summary. "As a result of [Chevron's] contamination, anyone who lived at this site in the past, who lives there currently, or who may live there in the future will faced significantly increased risk of cancer" and other oil-related health problems such as impaired kidney and liver function, a weakening of the central nervous system, reduced immune function and increased risk of spontaneous miscarriages.
Previously, expert evidence submitted by Dr. Daniel Rourke (formerly of the RAND corporation) in the Ecuador trial found that upwards of 10,000 people in the region will contract cancer in the coming years even assuming a comprehensive clean-up in the near term. This is partly due to the long latency period for cancer, which often is two to three decades or longer.
Notably, the summary of the LBG report made available to the public is partially redacted because Chevron succeeded in convincing various courts to seal embarrassing information that it found dirty soil samples during the "pre-inspections" process. See this Huffington Post report that calls on the company to release the information, saying U.S. courts should not help an oil company block the release of internal reports pointing to its own corruption.
The significance of the LBG report – even in its redacted form – can hardly be overstated.
The Ecuadorian villagers say they will use it in foreign courts to defeat Chevron's claims the judgment was based on "sham" litigation as they try seize Chevron's assets to pay for a clean-up. Separately, the villagers also plan to use the newly disclosed evidence about Chevron's sampling results as yet another layer of corroborating science that confirms the validity of the underlying Ecuador judgment, which has been affirmed unanimously by two separate appellate courts in the country.
"This new information shows that Chevron not only polluted the Amazon, but is still committing fraud on various courts around the world by trying to cover up adverse evidence," said Juan Pablo Saenz, an Ecuadorian lawyer who represents the communities. "It is becoming even more obvious that Chevron's management and legal team are engaging in fraud and racketeering to avoid paying a valid legal judgment.
"Given the ongoing human suffering in Ecuador, this strategy is not only immoral," he added. "It is sickening."
The LBG report also appears to severely undermine Chevron's recent verdict in a non-jury "racketeering" trial before Judge Kaplan, who issued a "findings" in favor of the company without even reading the Ecuador trial record. That proceeding – which Kaplan used to try to discourage foreign courts from seizing Chevron assets – has been criticized for the judge's open bias in favor of the oil company and for violating various international law principles.
Chevron has been trying to use the tainted Kaplan ruling to influence foreign courts to block enforcement of the Ecuador judgment, but the villagers assert it will backfire against the oil giant because the proceedings were so clearly infected by Kaplan's bias and his many comments disparaging the villagers and their country's judiciary. (For background on Kaplan's bias, see legal petitions here and here.) In any event, lawyers for the villagers predict Kaplan's decision will be overturned on appeal in the U.S., rendering it a nullity.
Saenz, who has represented the Ecuadorians since 2006, said the LBG report and the evidence of the pre-inspection sampling will help the villagers in their two-decade battle for a comprehensive remediation of their ancestral lands.
"We are clearly getting closer to bringing this company to justice," he said. "For any objective observer, this report is the final nail in Chevron's coffin in terms of its responsibility for wrecking the Amazon rainforest of Ecuador."
The secret information from the pre-inspections also will be devastating for Chevron in the coming months in enforcement courts, said Saenz. "More and more of this information will come out in the weeks ahead as the redactions are lifted," he predicted, noting that the government of Ecuador has thus far not released thousands of pages of notes taken by Chevron technical experts in Ecuador.
As an example of Chevron's malfeasence, the new information demonstrates that the company's technical workers discovered four unlined oil waste pits at the Lago Agrio 2 well site during their secret pre-inspection. It then reported the existence of only one such pit during the official judicial inspection when the judge was present. "Based on its PI results, Chevron misleadingly elected to avoid identification of those locations it knew would demonstrate the existence of its contamination," the legal brief noted in paragraph #90.
At another site, called SS-25, the LBG team "confirmed that the contamination documented by Chevron in 2004 [in its pre-inspection] still exists and is continuing to spread… groundwater continues to transport the petroleum hydrocarbons into the stream and sediments." The group confirmed that residents used the stream as a primary source of drinking water (see paragraphs #102-103).
The executive summary of the LBG report can be read here; the redacted report can be read here, with the site investigation findings here and accompanying opinions here, here, here and here; and a summary of the report's findings is on pp. 37 to 56 of this legal brief.
For background on the overwhelming evidence against Chevron relied on by the Ecuador court, see this document; this video; and this 60 Minutes segment.

Friday, June 13, 2014

In the wake of a controversial U.S. court ruling that a $9.5 billion Ecuador judgment against Chevron is fraudulent, the oil giant has been touting loudly its innocence of any environmental crimes in the South American country.

Chevron's lawyers even successfully pressured some CBS News corporate suits to yank a damning 60 Minutes piece from the network's website about the deliberate contamination of the Ecuador rainforest from 1964 to 1992 by Texaco, which Chevron later bought.

(See the dead link here. You can see the segment on my company's web site. So sue me, CBS.)

Instead of succumbing to Chevron's pressure tactics, CBS' lawyers should grow a backbone and demand to see contamination "playbook" documents that Chevron has been forced to produce in an international arbitration proceeding.

They are explosive and prove 60 Minutes got it right, and the U.S. judge got it wrong.

The playbook details how the company hid evidence of contamination during an eight-year Ecuador trial resulting in a $9.5 billion damage award that the Ecuadorians are waiting for Chevron to pay.

Meanwhile, Chevron is claiming in arbitration that the Republic of Ecuador should pay the judgment, and the two parties are duking it out before a panel of corporate trade lawyers who rent office space at The Hague and act as "judges" – more about them later.

The playbook took center stage in a recent arbitration filing by Ecuador. It appears the country's lawyers have gotten their hands on much, if not the entire, playbook, but the corporate trade lawyers are requiring Ecuador to redact or cover up the really damning evidence.

Even so, a recent rejoinder filed by Ecuador reveals enough to demonstrate what a morally bankrupt company Chevron is. (See the redacted rejoinder here.)

Here's what we know about the playbook, pieced together from the filings of both the Ecuadorians in U.S. court and the Republic of Ecuador in arbitration.

During the Ecuador trial Chevron's paid experts wrote the playbook to document how to handle the contamination they found at the well sites in soil and water tests.

Without the knowledge of the Ecuador court, Chevron's experts conducted unofficial and secret pre-inspections of the sites so they could avoid the badly contaminated areas during the official judicial inspections. (See page 63 in the rejoinder.)

Their pre-inspection findings would have been devastating to their case had they been turned over to the court. So they never were. (See page 63.)

Instead, they used the results to avoid the contaminated areas and test at clean spots, usually from soil and water at elevations higher than the huge, unlined and open pits Texaco built to store permanently pure crude and toxic water.

[Quick backgrounder: Texaco explored for oil in Ecuador from 1964 to 1992 and was the sole operator of the well sites during that time. The Ecuadorians filed their original lawsuit in the U.S. against Texaco in 1993, one year after Texaco left Ecuador. A U.S. judge dismissed their lawsuit ruling in 2001 at Texaco's urging the litigation should be heard in Ecuador. That year, Chevron bought Texaco. In 2003, the Ecuadorians re-filed their case in Ecuador but not before the U.S. 2nd Circuit Court of Appeals instructed Chevron that it must accept Ecuador's jurisdiction, which it did.]

Chevron routinely used deceptive methods, such as mixing clean soil with dirty and undercounting hydrocarbons, to hide or reduce toxic chemicals in samplings. (See pages 66-72.)

This table below, taken from the arbitration filing, reflects just a few of the thousands of pages of playbook notes Chevron's experts and field personnel took, describing the contamination and advising the company about ways to avoid it during the official judicial inspection.

It's heavily redacted. If it's true – as Chevron says it is – that the oil giant is innocent, and the truth is what it seeks, then why won't Chevron release the un-redacted, unedited playbook for all to see?

Maybe it has something to do with the 1995 remediation agreement that Chevron argues is its get-out-of-jail-free card.

The agreement, between Texaco and the Republic of Ecuador, released Texaco from government liability in exchange for a cleanup of a relatively small number of pits. It did not, however, release Texaco from third-party claims.

During the Ecuador trial, tests found contamination levels at the so-called remediated Texaco pits as high or higher than the ones not cleaned. The Ecuadorians accused Texaco of simply throwing dirt on top of the contamination to hide it.

Chevron's playbook backs that up.

At pits Texaco said it cleaned, Chevron – according to its own playbook – found contamination during its secret PIs or pre-inspections. To avoid or reduce the contamination Chevron, during the official judicial inspection, took soil only from the top layer.

Ecuador's rejoinder references the playbook notes of Shushufindi 24, Sacha 21 and Lago Agrio 6, all three well sites that Texaco said it cleaned.

The rejoinder reads: "During the JIs (judicial inspections) Chevron's experts sought to avoid finding pollution by sampling only to depths that it knew to be clean. For example, at Shushufindi 24, the soil boring log at pit 2 shows that during its PI, (pre-inspection) REDACTED "Then at the JI, Chevron strategically chose to take surface soil samples only – avoiding the known contamination below."

Chevron: What did you find at Shushufini 24, Sacha 21 and Lago Agrio 6?

If you found little or no contamination, then all is well.

If you found contamination and withheld it from the court, then your remediation agreement comes unraveled as does your entire legal case.

Chevron will say today that pre-inspections were allowed, but that's not what its attorneys said during the trial. Chevron wrongfully accused the Ecuadorians of pre-inspections, telling the court that pre-inspections were a "violation of legal security and due process of law," and "no technical team from ChevronTexaco Corporation has performed any secret tests here."

The rejoinder reads:"Yet by that time, Chevron's experts had conducted PIs at least REDACTED (number of) sites and taken over REDACTED (number of) samples." (See page 65.)

Chevron wants its shareholders to believe the Ecuadorians are history, even though enforcement lawsuits are underway in three countries and an appeal of the U.S. ruling is pending before the Second Circuit Court of Appeals, which reversed an earlier Kaplan attempt to stop enforcement of the Ecuador judgment.

And, while the Republic of Ecuador is fighting aggressively Chevron's arbitration claim, it is doubtful the arbitration panel will rule against the oil giant.

Brought in 2009, Chevron's arbitration action is based on alleged violations of Ecuador's Bilateral Trade Agreement with the United States.

For some time now, multi-national corporations have been abusing these trade agreements. Allowing it to happen are the corporate trade lawyers who sit on arbitration panels as judges and then rotate off as lawyers representing corporations before panels composed of their trade lawyer buddies.

Best example is the successful claim by Phillip Morris against Australia because the country placed warning signs on cigarette packs about the dangers of smoking after Phillip Morris began selling cigarettes there. See here.

International arbitration is fraught with serious conflicts of interest, and some countries are considering ending bi-lateral trade agreements due to numerous upside down arbitration rulings that have put the interest of corporations above a country's residents.

The Ecuadorians' best bet is in Canada, Brazil and Argentina where they have filed enforcement lawsuits to seize Chevron's assets in those countries as payment for the judgment.

Who knows? The entire Chevron playbook may see the light of day in one of those courtrooms soon. Or, 60 Minutes could stand by its work and demand to see it.

Ironically, during Chevron's "fraud" trial, Kaplan quoted former Supreme Court Justice Louis D. Brandeis' famous maxim that "sunlight is said to be the best of disinfectants" but when it comes to the allegations leveled by the Ecuadorians and their lawyer, Steven Donziger, Kaplan and the corporate trade lawyers hanging out at the Hague prefer the dark side of the moon.